HFMA Brighter Together - Procurement Forum The Future of NHS Procurement. Howard Blackith, Chief Information Officer

Transcription

1 HFMA Brighter Together - Procurement Forum The Future of NHS Procurement Howard Blackith, Chief Information Officer

2 Agenda Background Current Procurement Landscape Programme Update The Change Our Programme Engagement Innovation 2 The Future of NHS Procurement

3 Agenda Background Current Procurement Landscape 3 The Future of NHS Procurement

4 Current NHS Procurement Landscape The NHS currently spends 5.7bn on everyday hospital consumables, common goods, high value healthcare consumables and capital medical equipment with only c.40% going through NHS Supply Chain. Main issues NHS unable to leverage its buying power Fragmented supply chain Variable pricing of products Variable clinical evaluation and assurance 20% Locally procured contracts 40% Hubs 40% NHS Supply Chain Complex procurement and supplier landscape Competition for resources There were 7 Hubs, 5 of these have merged to create CPP and join the New NHS Supply Chain, bringing with them their market share and expertise. 4 NHS Procurement Review & Update

5 Spend on Goods - Breakdown 5 The Future of NHS Procurement

6 Agenda Programme Update The Change Our Programme Engagement Innovation 6 The Future of NHS Procurement

7 Response Overview Lord Carter s report reviewed operational efficiencies in NHS providers and recommended improvements in the way the NHS chooses, uses and purchases clinical supplies. Report identified: Improvements in procurement efficiency Over 600,000 products lines Up to 35% variation in product prices Adoption of a Procurement Transformation Programme Cash releasing saving: 2.4bn in five years Investment back into frontline services NHS buying power: The NHS has the potential, through greater collaboration, to leverage it s purchasing power on a national scale and deliver value for money for NHS Trusts and the taxpayer 7 The Future of NHS Procurement

8 Better Product Optimisation Will Increase Savings Optimisation range of products clinically evaluated and assured = Cash releasing savings that can be reinvested in front line services Reduced range = higher volume Better value for money 8 NHS Procurement Review & Update

9 Key Steps to Achieving Benefits for NHS In order to deliver cash releasing savings to the NHS, it is necessary to drive the following key outcomes: Category Management Product Optimisation Product Switching On-going initiatives provide valuable feedback and input on all steps: Nationally Contracted Products (NCP) Programme Get it Right First Time (GIRFT) Accelerated Access Collaborative (AAC) High Cost Tariff Excluded Devices (HCTED) 9 NHS Procurement Review & Update

10 DHL CPP DHL CPP CPP HST DHL Akeso CSS Foodbuy NoE CPC New NHS Supply Chain Operating Model Awaiting CO / HMT approval To be in-sourced Current contract expires in Spring 2019 with the ability to remove some, or all, of the procurement services prior to that date. Awaiting CO approval 10 NHS Procurement Review & Update

11 Programme Update All procurements completed DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR New Management Office of the NHS Supply Chain went live NHS Supply Chain customer engagement team TUPE d ICT Prime transition complete 2019 Transactional services live as single finance team All Category Towers contracted and in transition Medical Category Towers live Non-Medical & Capital Category Towers live Logistics transition complete Benefits projections remain at, or above PBC levels Supplier awareness, understanding and support increasing Trust feedback and support continuing to increase 11 NHS Procurement Review & Update

12 Summary of New Management Office CEO JIN SAHOTA CEO OFFICE COO FINANCE HUMAN RESOURCES STRATEGY & CORPORATE COMMS GOVENANCE & LEGAL CIO & BUSINESS TRANSFORMATION CUSTOMER SUPPLY CHAIN CAPA COMMERCIAL CHRIS HOLMES ANN MCCHESNEY STRATEGY CORPORATE COMMS TRANSFORMATION IT LEGAL GOVERNANCE QUALITY & ASSURANCE 12 The Future of NHS Procurement

13 New Management Office - Purpose, Vision & Values Purpose To use the strength of the NHS, to get the deals from the supply chain that patients and the public deserve Vision To be an extended part of Trust procurement teams, working collaboratively for the NHS, to deliver improved quality and cost of service for our patients and the public Values The NHS working with the NHS Responsive to the changing world around us Commercially astute and relentlessly competitive Clinically engaged and focused on outcomes 13 NHS Procurement Review & Update

14 Programme Update All procurements completed DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR New Management Office of the NHS Supply Chain went live NHS Supply Chain customer engagement team TUPE d ICT Prime transition complete 2019 Transactional services live as single finance team All Category Towers contracted and in transition Medical Category Towers live Non-Medical & Capital Category Towers live Logistics transition complete Benefits projections remain at, or above PBC levels Supplier awareness, understanding and support increasing Trust feedback and support continuing to increase 14 NHS Procurement Review & Update

15 Category Tower Service Providers - Contracts Awarded 15 The Future of NHS Procurement

16 Providers Go Live 1 October 2017 Capital Tower 9 8 May 2018 Medical Towers 1, 2, 3, 4, 5 & 6 5 July 2018 Capital & Non Medical Towers 7, 8, 10 & The Future of NHS Procurement

17 Category Tower Composition (HST) 17 The Future of NHS Procurement

18 NHS & Supply Chain Spend by Category Tower CPP DHL CPP DHL CPP Foodbuy DHL HST Akeso NoE CPC CCS 18 The Future of NHS Procurement

19 Key Timeline for Category Towers All Category Tower contracts signed Publish CTSP category priorities by Tower for 6 Medical Towers & Tower 9 Capital and non Medical Towers live Publish Y2 category priorities for Tower 9 Top slice arrangements start 2018 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR All procurements completed Publish CTSP category priorities by Tower for remaining 4 Towers Move to Buy Price = Sell Price & national pricing model 8 May - Medical Category Towers live NHSE / NHSI release detail of top slicing arrangement Update on details of top slice and national pricing model 19 The Future of NHS Procurement

20 Trust level Customer Engagement Overseen by Director of Customer Engagement Customer Insight Customer Offer Account Management Category Interface Leads Customer Proposition and Experience Voice of The Customer National and Regional Boards Reference Trusts Stakeholder and Customer Forums Regional Lead Account Manager Project Support Manager Clinical Nurse Advisor Trusts Acute, Specialist, Community, Mental Health and Ambulance 20 The Future of NHS Procurement

21 Working Together To Leverage NHS Buying Power The NHS currently spends 5.7bn on everyday hospital consumables, common goods, high value healthcare consumables and capital medical equipment with only c.40% going through NHS Supply Chain. Switching to products purchased through NHS Supply Chain leverages buying power of NHS to drive down costs for entire NHS 20% Locally procured contracts 40% Hubs 40% NHS Supply Chain Lots of individual contracts do not leverage the combined buying power of NHS 21 The Future of NHS Procurement

22 Savings Road Map & Working with Account Management Teams The process of developing local savings plans will be iterative and is expected to follow a cycle as illustrated below: NHS Trusts who have not already done so will be requested to share their procurement timetables with account managers. Account manager will compare NHS Trust procurement timetable with known CTSP sourcing strategies to determine where savings opportunities may arise and prepare an opportunities document. Initial meeting will be arranged between NHS Trust and account manager to review the and validate the opportunity document. Follow up meeting between NHS Trust, account manager and other relevant parties (e.g. CTSPs or CaPA) clarify opportunities and jointly agree CIP plan, including forecast dates, indicative savings and risk profile. Trust confirms Medical Director and FD support. As sourcing plans are executed, information updates will be provided. Periodic progress tracking meetings will take place as agreed between parties. As further sourcing timetables are developed by CTSPs, account manager will identify specific Trust opportunities and the cycle will iterate. 22 The Future of NHS Procurement

23 Innovation Supply Channels Rewards Category Management Customer Development Governance As Is The procurement landscape is highly fragmented, so suppliers of innovative products don t have a channel with critical mass. NHS Supply Chain are incentivised to deliver product price savings through price reductions and switching to less costly but equally viable alternatives. Has only recently been introduced and efforts are focused on product price reduction only. Clinical Evaluation Team is newly formed, not embedded in category management, hosted separately and providing the processes for evidence-based procurement. Led by Private Sector (NHS Supply Chain) and focused on achieving the profit objectives of DHL. Links between GIRFT, University hospitals and other health service organisations promoting innovation are in early development stages via e.g. Trusted Customer programme. Future Procurement landscape is rationalised with 80% of volume passing through the new operating model. Suppliers of innovative products now have a more efficient single channel with critical mass. Category Tower Service Providers will be incentivised to deliver product price savings and lower total system cost, which could be via innovation. Operating model has a more holistic view of category management and requires CTSPs to set future strategies, incorporating forward product plans (including innovation). Clinical evaluation is embedded within CTSPs, so the right experts focus on the right products, including innovative products, and make recommendations based on evidence. Customer development will be operated within the management function (Public Sector), so will have no profit motive and will be working for the NHS interests. Clinical & Product Assurance in the management function with clinical evaluation in Category Towers, so clearer bridges between strategic initiatives (e.g. GIRFT, AAR) and category strategy development. 23 The Future of NHS Procurement

24 Benefits For NHS Savings channelled back to frontline services Trusts will pay less for everyday consumables and equipment releasing funds to support other areas of work Releasing more time for core clinical activities Central sourcing and evidence-based clinical evaluation reduces the need for involvement at Trust level Greater NHS clinical involvement in purchasing decisions Clinicians will influence product specifications, clinical criteria, range management and product evaluation, utilising research from GIRFT, HCTED, DWG, ODEP More effective introduction of new products The new model will support the efficient introduction of new innovative products into catalogue through links with national research bodies and regional networks including AAR, TCO. Central Service Management Through utilisation of the national procurement organisation services such as deliveries, stock management and managing service disruption can be managed through one team rather than with individual suppliers 24 The Future of NHS Procurement

25 Benefits For Suppliers Lowering costs Lower sales and marketing costs by reducing interactions with Trusts as NHS Supply Chain will act as a single point of contact Reduced point of sales A single route to the national market, instead of having to knock on 240 trust doors Whole system costs, not unit costs Through increasing market share there can be a re-focus on delivering value rather than lowering unit prices Proper category management More mature procurement conversations with a longer term focus, discussing what the market looks like in 6months, 1 year, 2 years time etc. Commitment Where applicable and relevant genuine take or pay commitment deals providing suppliers with certainty and a predictable cash flow 1 NHS A joined up approach across the NHS Innovation A clear route for innovative products, working alongside AHSNs and AAR 25 The Future of NHS Procurement

26 Questions and Answers Howard Blackith Chief Information Officer E: T: